Author Question: Current assets values may be estimated by calculating (Read 34 times)

jlmhmf · **on:** Apr 25, 2021

Question 1

Consider two present value factors: one for n = 5 years and one for n = 15 years. If the interest rate falls from i = 10% to i = 5%, which rises by more in percentage terms?
◦ PVIF for n = 5
◦ PVIF for n = 15

Question 2

Current assets values may be estimated by calculating
◦ the future value of all cash flows expected from the asset.
◦ a sum of all cash flows forecasted from the use and/or sale of the asset.
◦ the present value of all future cash flows expected from the asset.
◦ the cash flows expected from the asset without adjusting for the time value of money.
◦ only the present value of the cash flows to be received in the first two years since later cash flows are too uncertain to be considered.

honnalora · **Reply #1 on:** Apr 25, 2021

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